Are property owners in a rush to sell?

The Royal Institute of Chartered Surveyors (RICS) has today issued a report into the UK property sector which appears to show a significant increase in sellers during February. The number of people placing their homes on the market increased twice as fast as those looking to acquire property in February which will place immediate pressure on UK property prices.

Over the last few months we have seen a rebalancing of the UK property market with buyers outnumbering sellers just a short while ago while the opposite is now the case. There are also concerns that first-time buyers, the lifeblood of the UK property market, are struggling to secure finance in the short to medium term as UK mortgage companies still insist on very tight loan criteria which is resulting in limited liquidity.

As we have seen in the past, if UK house prices start to fall back then we could see more sellers appear in the short term which would lead to a potential vicious circle of more sellers, fewer buyers and a reduction in house prices. Consumer confidence and investor confidence in the UK economy and the UK property market is a vital element of any long-term recovery in the fortunes of the UK and falling house prices are not what the UK government wants to see at this stage of the economic recovery.